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Choosing Between a Fixed-Rate Loan and an Adjustable-Rate Loan

Posted by Nestlewood Realty on August 01, 2019  /  in Blog, Home Buyers, Home Buyers, Questions and Answers, Questions and Answers, Realtors, Uncategorized  /  Comments off

Should I get a fixed-rate loan or an adjustable-rate loan?

You’re excited to find the perfect home that fits your lifestyle, family, and aesthetic, but the hardest part of the home-finding process is the home-buying process. To make your journey to your new home easier, we want to break down two of the most popular loan types and help you find which is best for you.

Two of the most popular loan types are fixed-rate loans and adjustable-rate loans. Fixed-rate loans have the same interest rate locked in for the life of the loan. Adjustable-rate loans lock in an introductory interest rate for the first few years and they can fluctuate depending on outside factors throughout the life of the loan.

So which one is right for you?

adjustable-rate loan

If you have the income to support unpredictable changes, you could end up saving money with your adjustable-rate loan if your interest rate drops. However, if your interest rate goes up, so will your monthly payment.

If paying more than you can afford doesn’t sound like something you’re willing or able to do, a fixed-rate loan might be the safer bet because an adjustable-rate loan will fluctuate. With a fixed-rate loan, monthly payments will not change due to fluctuating interest rates and you can easily budget for your monthly bill.

There is also safety in knowing you can refinance your fixed-rate loan in the future. The value of your home, your credit score, accumulating too much debt and losing some of your income can affect whether or not you are able to refinance an adjustable-rate loan. If your home value drops too much or your credit score takes a hit, you may be denied the ability to refinance for a lower interest rate. (This was part of the cause of the mortgage crisis of 2008-2009!)

But be careful, you have to pay for safety. Fixed-rate loans typically start out with higher interest rates than variable-rate (or adjustable-rate) loans. For example, the rate on a fixed-rate mortgage might be one or two percent higher than the rate on an adjustable-rate mortgage (ARM). That difference can make a dramatic change in your monthly payment.

If you know you are going to move before your ARM adjusts, then getting an ARM makes sense. The number one reason Millenials and Generation Z moves is a change of employment with an increase in pay. Millennial job habits commonly include changing jobs within two years. With mobility being a growing trend, then having a long-term, fixed-rate loan may not be desirable. The key is to not catch yourself in a buyer’s market with home prices on the decline. You may end up being forced to sell for a lower price than you would want, due to your need to move.

At the same time, fixed-rate loans are available in a variety of yearly terms and the shorter the term of your loan, the lower the interest rate will be. This means you’ll end up paying less in interest altogether and you will build equity and own your home sooner. But remember: The shorter the loan period is, the higher the monthly payments will be.

A standard 30-year fixed rate mortgage is traditionally the most common way to buy a home. But the Washington Post reported that more homebuyers are turning to adjustable-rate mortgages because of the low initial rate of an ARM.

In the end, there are pros and cons for each type of loan. Before you make a decision, seek advice from an expert– like one of our agents, who will be able to help you choose between a fixed and adjustable-rate loan.

High End “Green” Homes

Posted by Nestlewood Realty on June 04, 2019  /  in Blog, Home Buyers, House Remodeling, Modern Home, Questions and Answers, Uncategorized  /  Comments off

As more buyers look to reduce their carbon footprint, eco-friendly or “green” amenities are a must, especially in high-end homes. But this is more than just having energy-saving light bulbs. For many, “going green” means going high tech, and sellers should take note of these trends as they become more and more common in high-end real estate.

Here’s a look at what’s new and improving in the way of green.

SMART HOMES

Smart homes are becoming the norm across the high-end real estate market. Voice activated and app directed commands allow you to adjust indoor and outdoor lighting as well as heating, cooling, watering, and washing. Take advantage of non-peak hours and control electrical usage while out of town.

DECONSTRUCTED DESIGN

Deconstruction is a concept that utilizes recycled raw materials. This trend is toward more authentic, natural materials such as exposed wood, metal, and brick. It is an exposed style of un-building reminiscent of the ’90s, but with a more refined and green edge to it through its emphasis on reuse, salvaged and donated materials. By mixing in more green materials such as quick-growing bamboo, you can add even add “newer” natural materials to the mix.

BETTER ENERGY GENERATION AND STORAGE

Smart tech is making life easier, cleaner, and cheaper. More efficient batteries are making electrical storage more effective while microgrids allow you to use and buy electricity from off-grid sources, making it easier to take advantage of more clean energy than ever before. Solar technology and the selling benefits they provide make electricity increasingly cheaper for you as a homeowner. Upper-tier home buyers are looking for more than just your typical solar panel. Innovations like Tesla’s solar panel roof tiles are the type of high-tech upgrades that catch the eye of those luxury buyers.

INSTALL AN ENERGY MONITOR

One of the easiest things you can do to decrease energy consumption around the house is to install an energy monitor. Household energy monitors are easy to use and inexpensive, and allow you to see a minute by minute presentation of your energy use. These devices work by clipping onto the power cable coming into your home and transmitting a wireless signal to a display that shows precisely the amount of power being consumed. In studies conducted in the British Isles, households with energy monitors saved between 10 to 15% annually by instituting the simple and inexpensive device.

INSTALL A WIND GENERATOR

Did you know that you can actually purchase smaller versions of these massive power generators? The costs of a home wind generator vary greatly. Some have built their own wind generators with off-the-shelf parts from their local hardware stores. Others have purchased kits or paid for professional installation to supplement the power purchased from their local electrical grid. Many kit based generators will produce only enough power to offset 10-15% of your home energy costs.

With careful planning and wise material choices, you can design an eco-friendly home that’s not only gentler on the planet, but that will help you save on energy bills in the long run.

Interested in remodeling your home to sell or positioning your already green home to buyers? Consult with one of our agents today.

Unexpected & Hidden Costs When Buying Your First Home

Posted by Nestlewood Realty on May 23, 2019  /  in Blog, Home Buyers, House Remodeling, Questions and Answers  /  Comments off

Buying a home for the first time is exciting but can also be a scary experience. You are excited to redecorate, paint, get new furniture, and settle in!

But unfortunately, there are often a lot of hidden costs when buying a home that you may not have budgeted for when you determined your mortgage terms and homeownership costs. Zillow estimates that homeowners, on average, end up spending around $9,000 the first year on hidden costs!

There are some unavoidable hidden costs that you may not have factored in when you purchased your home and signed on for a mortgage.

These costs come in the form of closing costs, hiring a moving company, home inspection, hiring a painter, lender fees, property taxes, homeowner’s insurance, setting up internet, cable, and utilities which will be more expensive than your renter’s utilities. These costs are unavoidable and may be a one-time cost or reoccur monthly/yearly. Zillow estimates that you should be prepared to spend an average of $6,000 a year on these unavoidable costs.

When you first buy your home, you dream up all of the project and upgrades you want to do once you move in. Unfortunately, these costs add up and will almost always cost more then what you budgeted. These projects could be as simple as repainting the master or as technical as blowing out a wall in your living room to open it up to the kitchen.

Home DIY TV shows make us think that these projects are simple, inexpensive, fast, and easy to do yourself, but that is not always the case.

We are not all Chip Gaines or have the skills and knowledge to redo the plumbing in your bathroom to expand the shower. For these projects, you would want to hire help and labor rates are the quickest rising cost in your remodeling budget.

Another cost that most new homeowners do not think about it the cost of maintenance. This comes in the form of having to buy a lawnmower or a snow blower, getting the carpets cleaned, having someone clean out your gutters, HVAC maintenance, pest removal, house cleaning, pressure washing, and window cleaning.

For most of these, you can learn how to do them yourselves, which will only cost you money in materials and a few hours, or reading or watching videos to learn the best techniques. If the projects get to intensive it is better to higher a professional in the field.

Buying a home, for the first time is overwhelming, especially when you take a look at the long list of expenses and costs that add up before you can even move into your new home! But don’t be overwhelmed. By planning a budget for your home, and making a list of all costs that are needed you can make sure that you have smooth sailing every step of the way in your first year and every year afterward.

Here are the main costs to remember again: home inspection, closing costs, property taxes, lending fees, maintenance cost, and upgrades.

Before you close on a deal, grab some advice from your Nestlewood Realty Agent! We are here not only to help you find your dream home, but also to make sure you’re fully prepared for the costs you will incur.

 

How to Prep a Room to Paint

Posted by Nestlewood Realty on May 06, 2019  /  in Blog, Home Buyers, House Remodeling, Selling Your Home, Selling Your Home  /  Comments off

With summer right around the corner, now is the time that most of us find ourselves with a list of projects to get done. One of the most exciting projects is getting to repaint parts of your home. An important but overlooked step in painting is preparing your room and wall

If skipped you may end up with paint splatters on your flooring and light fixtures, or paint on your ceiling. Though when done correctly, it will make the entire process smoother and will leave your walls looking amazing! Whether you are thinking about selling your home or are just putting on a fresh coat, here are some of our top tips for prepping your room to paint like a pro.

1) Clear the Room

Take everything out of the room. This includes all of your furniture, curtains, blinds, art, electrical outlet switch plates, shelving, rugs, etc. You don’t want to accidentally get paint on any of your home furnishings so try to move everything into a different area of your home.

2) Cover the Flooring and Fixtures

Lay down a tarp or drop cloth on top any of the furniture that you were unable to move out of the room and lay the tarp on top of all of your flooring to protect it from any drops of paint. Cover lighting fixtures with plastic or tarp and wrap plastic bags around doorknobs and hooks using rubber bands.

3) Clean the Walls

You may not realize how much dust, dirt, and pet hair accumulates on your walls. Use a sponge and a mild soap to clean all of the walls that you are painting. During this step, you also want to check for any cracks or holes that need to be filled with caulk or spackle and be sure to sand the area down to create a smooth surface for applying paint.

4) Apply Painter’s Tape

Using painters tape will ensure that you get clean, straight lines when painting and will help stop drops of paint getting on any molding. First, you want to clean your moldings to get rid of any dust buildup. Otherwise, the tape will not stick well and will become a hassle to keep in place. Next, lay the painters tape on top of your molding and cover the entire base of the wall you are painting. You will also want to tape around window frames, vents, and along the ceiling line. Once you lay down the painter’s tape you want to go back over the edge of the tape that is against the wall and press it down to ensure there are no air bubbles and it is as tight as can be.

5) Prime & Paint

You are now ready to begin priming your walls and painting!

 

Sources

https://www.familyhandyman.com/painting/tips/using-masking-tape-when-painting/

https://www.houzz.com/magazine/how-to-paint-a-room-prep-to-painting-stsetivw-vs~71374323